Definition
A temporary postponement of loan payments granted during financial hardship, with the understanding that interest may continue to accrue.
What to consider
- Understand the temporary relief offered during financial hardship.
- Know the terms and how interest will continue to accrue.
- Plan for a smooth return to regular payments afterward.
Real world scenarios
- When Emily faced temporary financial hardship due to unexpected medical bills, her lender granted her forbearance, pausing her loan payments for a few months.
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